This copy is for your personal non-commercial use only. To order presentation-ready copies of Toronto Star content for distribution to colleagues, clients or customers, or inquire about permissions/licensing, please go to: www.TorontoStarReprints.com

GM to invest $560 million to build new Chevy Equinox at CAMI plant

GM Canada will invest $560 million in its CAMI assembly plant in southern Ontario, the auto maker announced Thursday.

The ‎money will be spent on equipment and tooling to prepare the Ingersoll facility and its suppliers to make the next generation Chevy Equinox, the company said.

No new jobs were announced.

The investment is about securing the CAMI plant’s future, GM Canada president Stephen Carlisle told reporters after the announcement at the Canadian International Auto Show.

“This wasn’t so much about job creation as it was about solidifying the plant’s future,” he said, adding this type of commitment can extend a facility’s lifespan by a decade. The plant employs about 3,000 people.

ARTICLE CONTINUES BELOW

GM said it will spend $190 million directly on equipment and tooling at its plant and the other $370 million on vendor tooling with suppliers in Canada.

The announcement was one of two made by major North American automakers at the Canadian International Auto Show.

The two announcements come on the heels of a major $2 billion commitment from Fiat Chrysler Automobiles to retool its Windsor assembly plant, and Ford of Canada’s earlier commitment to spend $700 million retooling its Oakville assembly facility.

The Ingersoll investment also raised hopes for the future of GM’s two remaining Oshawa plants.

The commitment in Ingersoll shows Canada can compete for auto production with other lower cost jurisdictions, said Jerry Dias, national president of Unifor Canada, the union that represents auto workers.

“‎Canadian workers have the skills and dedication needed to build the highest quality vehicles in the world,” Dias said in a statement.

ARTICLE CONTINUES BELOW

However, Carlisle said any decision about Oshawa is still down the road.

“Oshawa is a separate matter,” Carlisle said in an interview after the announcement.

GM has had some “very positive” discussions over the past five or six weeks with various internal and external partners, Carlisle said.

No decision is expected until after the company reaches a new contract agreement with the union in 2016.

That’s also the year GM’s commitment to maintain a specific level of production in Canada – as part of a $10.85 billion bailout by the Ontario and Canadian governments – expires.

“It’s going to be a whole new ball game after 2016,” Carlisle said

Meanwhile, Oshawa is scheduled to lose production of the Chevrolet Camaro to a plant in Lansing, Mich., later this year, at a cost of 1,000 jobs.

The older consolidated GM plant in Oshawa, which produces the Impala sedan and the Equinox, is scheduled to close in 2016.

The recent spate of auto industry announcements demonstrate Canada can hold on to its existing auto industry amid growing competition from Mexico and the southern U.S., Dennis DesRosiers, of DesRosiers Automotive Consultants, said in an interview.

‎However, it’s unlikely the Canadian industry will expand beyond its current footprint even with the help of a Canadian dollar trading at 80 cent U.S., DesRosiers said.

Overall, Canadian auto industry production climbed slightly to 2.38 million vehicles last year. But Canada’s share of North American production continued to fall to 14.1 per cent, he has noted.

In the previous four years, Canada had received just $2.5 billion in new auto industry investment, while Mexico got $20 billion, according to the Center for Automotive Research in Ann Arbor, Mich.

‎In addition to lower wages, Mexico has free trade agreements with 45 other countries making it easier to export product around the globe, the center’s research director Sean McAlinden noted.

“A whole pile of companies, including Honda and Toyota, have announced more work in Mexico than in Canada,” McAlinden said. “Then we have these older Detroit Three facilities, which haven’t received any new product and continue to lose product.”

For now, a strong recovery in North American auto sales is keeping most plants running full tilt.

The CAMI plant also produces the GMC Terrain. Production of the Terrain is expected to move to Mexico in 2016.

GM’s investment in the Cami plant comes without any incentives from government, Carlisle confirmed.

Since March 2013, the company has invested $800 million in the plant, including Thursday’s announcement.

More from The Star & Partners

LOADING

Copyright owned or licensed by Toronto Star Newspapers Limited. All rights reserved. Republication or distribution of this content is expressly prohibited without the prior written consent of Toronto Star Newspapers Limited and/or its licensors. To order copies of Toronto Star articles, please go to: www.TorontoStarReprints.com